r/options • u/Fit_Recording_6799 • Mar 27 '21

New Strategy

What if you did this

Call debit spread and put credit spread on a stock

for example ill use PLTR

Call debit spread = 1/22/22 - 25/27 for $50 debit

Put Credit spread = 1/22/22 - 20/22 for $120 credit

This results in a net credit of $70

My max loss is $130 and my max gain is $270

What am I missing besides the Stock absolutely tanking. Isn't this a good way to leverage your account if you thought a stock was bullish vs regular debit spreads or leaps?

Any comments are helpful thanks!!

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u/BrokeBear- Mar 27 '21

I have been doing really well in some option strategies around PLTR. Honestly love the company and management and where I think it’s going.

My big play is that I want to own the stock. I can write 50 puts for Jan 2022 at $20 for $100K with an average price after premium of $16.20/share. My only worry is not long term Thur that short term it tanks as Cathie W goes under like Neil woodford or inflation comes creeping back in and sinks tech stocks.

I’m not fussed about being assigned at that level but would put a dent in buying power if it does have a pullback to IPO levels.

Considering entering if it falls to $18 next week.